The Price of Open Space Laws

Simon Que reports:

One state agency that oversees this land shortage is the Midpeninsula Regional Open Space District, a California state district that administers the Open Space Preserves in the San Francisco peninsula. According to their website, the Preserves contain 50,000 acres of undeveloped land. Assuming that a single-family home can be built on a quarter acre of land and house an average of three people, that is to enough room for 600,000 people! For comparison, San Jose is the largest city in northern California but has less than a million people as of the 2000 census.

The District’s website boasts that the "preserves are generally kept in a natural condition in order to best protect the environment and wildlife habitat, and are developed with only the amenities needed to provide low-intensity recreation." If this were done in accordance with what people are willing to pay for, then there is no problem. But the District has declared that this land should be designated as open space, supported by property taxes and unaffected by market demand

As a result, people don’t have a chance to determine with their economic decisions how much real estate to develop and how much land to keep preserved. As a result of government takeover of this land, prospective homeowners are unable to have the real estate that they would otherwise have had and thus must pay higher prices for housing in the Bay Area. To the central planners who run the district, there is apparently nothing like keeping raw land empty while residents nearby pay sky-high prices for housing.

Many people think that higher market value for real estate means more wealth, but Paul Tolnai has debunked this notion. Additionally, although nominal incomes in San Jose are higher compared to other cities with cheaper housing, the difference in incomes is much less than the difference housing costs between San Jose and other cities. In fact, when adjusted for the cost of living, a significant chunk of which is housing, incomes are actually lower in San Jose and San Francisco than elsewhere. The sad truth is that environmental regulations on land development make people poorer, in the Bay Area and wherever else they exist.

Some places don't like middle income people.